U.S. private prison GEO suspends dividends as sector faces pressure on finances

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Earlier this year, Biden signed an executive order to roll back the U.S. government’s use of private prisons, a part of what he called an initiative to tackle systemic racism.

Another private prison, CoreCivic (NYSE:CXW) Inc, has said it would offer $400 million in bonds to reduce debt and for corporate purposes.

Shares of GEO were down about 6% before the bell and those of CoreCivic fell about 2%.

GEO said it intends to maintain its corporate tax structure as a Real Estate Investment Trust (REIT), but would evaluate the structure, considering potential changes to its financial operating performance among other factors.

It had $291 million in cash on hand and about $209 million in borrowing capacity available under a revolving credit facility and $450 million under its senior credit facility, as of March 31, the company said.

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